The High Court in Australia will deliver its decision on a challenge to the federal government's refugee swap with Malaysia next Wednesday.
The court has reserved its decision after a hearing lasting 1½ days on whether the agreement with Malaysia could compromise Australia's international obligations to refugees.
Lawyers for asylum seekers who arrived at Christmas Island after the deal was signed, say Australia cannot guarantee the rights of refugees sent to Malaysia.
But Commonwealth Solicitor-General Steven Gagler told the court that was not the case.
The ABC reports Mr Gagler said the agreement and declaration of Malaysia as a suitable destination is legal and does meet the obligations Australia has under the UN refugee convention.
He said Australia's only obligation is to ensure protection of those with a well-founded fear of persecution.
He told the court Australia could declare a country a suitable place to send asylum seekers regardless of whether it was a signatory to the convention or have relevant domestic laws, as was the case with Nauru.
Solicitor David Manne, said his clients, a boy, 16, and an Afghan man, 24, are petrified and have very substantial fears about being sent to Malaysia.
He said his clients were asking the court to rule on whether what the Government proposes to do is lawful.
''That is whether the Australian government's proposal to expel them to Malaysia instead of allowing them to stay in Australia and seek refugee protection here is in fact lawful and within power,'' he said.
''So it's a fundamental issue to be resolved.''
The ABC reports the government's plan to send asylum seekers to Malaysia will remain on hold until the decision by the court.